China Economic Growth

The purpose of this research report is to provide an overview of China’s economic growth in relation to the long term economic growth drivers. Critical assessment will be made on the growth drivers to determine whether they lead to long term economic growth.

Since the reform and opening up, the economy of China grows significantly, as an emerging economy, China's economy has made tremendous contributions to the global economy, and Renminbi has become one of the most important currency in the world. According to the survey conducted by China National Bureau of Statistics found that from 1979 to 2012, China has attained an annual average growth rate of 9.8% for its national economy, while the annual average growth of the world economy is only 2.8 % during the same period. In past 30 years, China's GDP surpassed Japan’s, China became the world 's second largest economy, in addition, the huge total volume of trade makes China become the world 's largest trading nation. The contribution of China’s

The economic growth rate of China rate grew by 1.8 percent following the measure of economic growth which is the GDP growth rate. The GDP growth rate is one of the adequate economic growth measures. It indicates that the rate expanded 1.8 percent in the second quarter of 2016 increasing from the previous quarter of 1.2 percent growth. It also surpassed the market projections of 1.6 percent expansion (Levchenko & Zhang, 2016). It was the strongest economic growth

An article in The Economist from November 13th 2009 written by Joshua M Brown titled ‘Secret Sauce’ supports my findings of why China’s GDP growth can be explained by their TFP growth. Brown (2009) argues that China’s rapid growth is not just due to heavy investment as is the common claim, but to the fact they have the fastest productivity gains of any country in the world. The United States has achieved small but steady TFP growth which translates into a similar smaller annual GDP growth than that of China. Australia on the other hand has in the past 10 years experienced a slowdown in TFP growth but it has seemed not to have affected total GDP growth too much.

Economic growth refers to an increase in an economy’s productive capacity, as measured by changes in its real GDP (adjusted for inflation), over a period of time. Growth may be measured quarterly, annually, or year on year (changes from one quarter to the corresponding quarter the following year). Annual growth is used to identify trends in the business cycle, while quarterly growth provides an indication of the economy’s short-term direction, and year on year growth to show annual progress.

International trade and subdued investment combined conspired to the slowest world growth since 2009. World bank economic growth is expected to rise to 2.7% in 2017 from 2.3% last year. Throughout Europe and Japan, monetary support and fiscal policies should help support economy activity this year. In China, growth is projected around 6.5% which reflects certain factors like uncertainty about global trade, and private investments. China accounts for about one-tenth of all global imports and exports, and roughly one fifth of investment accounts but has slowed from 21% to 10% in the last few years. With the recovery in certain commodity prices, like oil, the divergence is expected to narrow heavily. The environment the world is in right is a difficult one, negative interest rates constrict monetary policies and may warrant more fiscal policies. What needs to be done is to initiate more useful policies to include human capital, investment, global technology transfer, and heavily promoting trade in order to obtain at least some level of positive

The Chinese economy is one of the biggest economies in the world. It is also the fastest growing economy in the world, with a current growth rate of 7.8%. The Chinese economy has multiple strategies to help promote the economic growth. One of which being, China investing heavily into education. Another strategy is attracting Foreign Direct Investors. Finally, one last strategy is China and their memberships in free trade agreements. Through these strategies China gained this high rate of growth and thrive to maintain it.

The author examines the proposition by Larry Summers, the United States Treasury Secretary, on the economic approach presented by China and India in regard to the next decade. Larry Summers observes that there is no certain growth in China, thus he urges people to deviate from the reliance on the predictions of sudden growth in Communist China, using what they term as Asiaphoria (WSJ). The most significant and acknowledged fact on cross national growth is the regression of data in relation to the mean. The authors argue that the evidence of continuous national growth in a period of a decade does not present a guarantee for continued growth. On the contrary, quick national growth has been noted to lead to a slump in the rate of economic growth.

level (Zhu, 2012, N.p.). Yet since the change occurred, China’s real per capita GDP has

China, the most populous country in the world, has experienced an abnormal growth rate in Gross Domestic Product over the past decades. However, facts and statistics indicate an economic growth slowdown of the Asian giant.

Growth: Economic growth controls and regulates production and consumption of resources that a society uses. Based on market values, the economy can rise or fall. With PPF, there can be economic growth if resources are allocated efficiently. (Investopedia)

From 1980 to 2010, China relied on a uniquely successful investment- and export-led development model for its 30-year miracle of double digit GDP growth. However, to make rapid industrialization possible, China directed most of its investments to the cities, financed massive urban infrastructure and development projects. In result of

Capital accumulation involves the rate at which investment in capital occurs, relative to its depreciation (Swan, 1956)- the rate at which an economy possesses productive human and physical resources available to create products and services. As GDP is a function of capital per effective worker, there is a clear relationship between capital and economic growth. (Appendix 1).

Growth of the economy can be measured in several ways. One of the most common ways is by measuring the changes in GDP of the country. GDP (Gross Domestic Product) is the total value of goods and services produced in a country. As per Mankiw (2003), the long-run determinants of GDP are the factors of production, which are capital, labour and technology. The correlation is such that GDP grows when the factors of production increase or when the available technology improves.

According to Balami (2006) In the long run, the rate of growth of (per capita) GDP is determined by population growth and the rate of technical progress. Higher investment can speed up growth temporarily, but as the capital-output ratio rises, an increased proportion of GDP needs to be invested to equip the increasing labour force, and the capital-output ratio converges towards a finite limit, however high a proportion of GDP is invested. Low investment slows down growth, but the capital-output ratio falls towards a lower limit which is always positive for positive investment.